Post-Divorce Estate Planning: The Final, Crucial Step

The divorce has been finalized, and assets have been distributed to each party. Joint accounts have been separated, retirement assets are now held in your name or in a newly established account, and the deed to your home has been updated according to the divorce decree. You may feel like you’re finally at the finish line after a long and emotional journey—but there are still a few critical steps before you can truly move forward. In fact, these may be the most important steps of all: updating your estate plan to reflect your new circumstances.

Whether or not you had an estate plan during your marriage, now is the time to create or revise one. The plan you had while married likely no longer applies. Estate planning goes beyond just having a will or a trust (consult your estate planning attorney to determine which is appropriate for you); it also includes updating beneficiary designations on your financial accounts.

Failing to update your estate plan can lead to unintended consequences and potentially undo the careful work you did during the divorce to separate your assets. Here are a few key risks to consider:

1. Your Ex-spouse Could Inherit Your Assets

In many cases, your ex-spouse may still be listed as the beneficiary on your retirement accounts, life insurance policies, and investment accounts.

Important: Beneficiary designations override your will. These must be updated directly with the custodian or company that holds the account.

For example:

· If you have a life insurance policy through your employer, contact the insurance provider directly to update your beneficiary.

· For retirement accounts like IRAs or 401(k)s, reach out to the custodian (e.g., the financial institution) to make the necessary changes.

2. Your Children’s Inheritance May Be at Risk

If your minor children are listed as beneficiaries and your ex-spouse is their legal guardian, your ex could gain control over how those assets are managed in the event of your passing. Establishing a trust for your children may help mitigate this risk. (Consult your estate planning attorney for guidance.)

3. Outdated Powers of Attorney

Having updated powers of attorney—both healthcare and durable (for financial matters)—is increasingly important. Make sure the individuals you designate are those you trust to act in your best interest.

Post-Divorce Estate Planning Checklist:

· Update your will and/or trust documents

· Review and revise beneficiaries on life insurance, annuities, and retirement accounts

· Assign new powers of attorney (healthcare and financial)

As you take these final steps, you’re not just closing a chapter—you’re setting the foundation for a secure and empowered future. Ensuring your financial assets are protected, your children are cared for, and your wishes are honored will give you financial confidence as you move forward.

About the Author:

Article provided by Barbara Shellman MBA, AAMS™, APMA™, CDFA® a Financial Advisor with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange, who can be contacted in the Traverse City office at 231 995 7015

Barbara.shellman@stifel.com

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